November SCW

This monthly update presents real estate related issues pending before the United States and California Supreme Courts. Cases are listed by subject matter. Cases with opinions issued by a lower court and accepted by the United States or California Supreme Court are located in the “Recent Case Decisions.” Cases currently under review and pending before the United States or California Supreme Court are not citable illustrations of law.

(No. 10–948) – Whether, after a valid arbitration agreement has been agreed to, claims brought under the Credit Repair Organizations Act can be heard in court.

Government Property

BP America Production Co. v. Watson

(No. 05-669) – Whether a statute of limitations period applies to federal agency orders demanding the payment of money claimed by the agency under a lease agreement.

Legal aspects

Magner v. Gallager

(No. 10-1032 ) – Whether the claim that, to be compliant with the Fair Housing Act, owners of properties who rent disproportionately to African-Americans must increase their operating costs, is recognizable by the court under the Fair Housing Act.

Real Estate Settlement Procedures Act (RESPA)

Tammy Foret Freeman, et al. v. Quicken Loans

(No. 10-1042) – Whether, for an unearned fee charged by a real estate settlement services provider to be considered a violation of the Real Estate Settlement Procedures Act (RESPA), the fee must be divided between two or more parties.

Taxes

Armour v. Indianapolis Docket

(No. 11-161) – Whether a local taxing authority may forgive the tax obligations of homeowners who chose to pay over a multi-year installment plan, while concurrently refusing to refund payments made by property owners who paid their assessments in full.

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California Supreme Court

Arbitration

Pacific Palisades Bowl Mobile Estates, LLC v. City of Los Angeles

(S187243) – Whether the Mello Act and the California Coastal Act apply to the conversion of a mobilehome park to residential ownership if the park is located within a coastal zone. [For RCD of (uncitable) lower court opinion click here.]

Sanchez v. Valencia Holding Co. LLC

(S199119) – Whether the Federal Arbitration Act preempts state unconscionability law regarding an arbitration provision in a consumer contract.

Tarrant Bell Property, LLC v. Superior Court

(S179378) – Whether a trail court may refuse to enforce an arbitration provision contained in a lease for fear of judicial inefficiencies.

Wisdom v. Accentcare, Inc.

(S200128) – Whether an arbitration provision in an employment application is unconscionable for lack of mutuality, or whether the provision is binding on both parties and enforceable.

Assessments

Concerned Citizens for Responsible Government v. West Point Fire Protection Dist

( S195152) – Whether an assessment imposed by a fire protection district for fire protection services is valid.

Phelps v. Orange County Assessment Appeals Bd.

(S174418) – Whether the vesting of a life estate constitutes a change of ownership triggering reassessment.

Attorney duty of loyalty

Oasis West Realty, LLC v. Goldman

(S181781) – Whether an attorney who represented a real estate developer breached his duty of loyalty to the developer then the attorney later engaged in political opposition to the development years after his representation of the developer.

Contracts

Edwards v. Arthur Andersen LLP

(S147190) – Whether all employee non-competition provisions in employment agreements are unenforceable or only those employee non-competition provisions which prevent an employee’s pursuit of a lawful trade or business on termination of the employee.

Sterling v. Taylor

(S121676) – Whether oral evidence can be used to clarify the ambiguities in a written agreement to provide the terms needed for an enforceable agreement.

Conveyance

Ste. Marie v. Riverside County Regional Park & Open-Space Dist.

(S159319) – Whether property acquired by a regional park was “actually dedicated” for recreational purposes requiring voters to consent to its transfer to a school district.

Defense

City of Santa Barbara v. Superior Court (Janeway)

(S141643) – Whether parents of a child who died during activities operated by the city may sue the city for gross negligence after signing an agreement releasing the city of liability.

S188128 – Whether a lender’s withdrawal of a portion of a probable compensation deposit in an eminent domain action negates the property owner’s right to challenge the taking.

Mt. San Jacinto Community College District v. Superior Court

(S132251) – Whether, in a quick-take eminent domain action, the property’s date of valuation is the date of trial or the date compensation is deposited with the court. [For RCD of (uncitable) lower court opinion click here.]

Environmental Documents

Communities for a Better Environment v. South Coast Air Quality Management Dist.

(S161190) – Whether, in determining if a project requires preparation of an Environmental Impact Report, a baseline level of allowed emissions under an existing permit can be relied upon if it does not reflect existing physical conditions.

Regional Council of Rural Counties v. State of California (Department of Water Resources)

(S138975) – Whether an environmental impact report which fails to include critical information is legally sufficient.

Stockton Citizens for Sensible Planning v. City of Stockton

(S159690) – Whether all relevant periods for challenging the unpublished approval of a project by the planning director as in compliance with the master development plan, and thus exempt from the California Environmental Quality Act (CEQA), commenced to run on the planning director’s administrative approval of the project.

Tomlinson v. County of Alameda

(S188161) – Whether a petitioner must exhaust all administrative remedies prior to challenging a public agency’s determination a project is exempt from the California Environmental Quality Act (CEQA).

Environmental hazards

Nelson v. Exxon Mobil Corp.

(S179122) – Whether the right to recover punitive damages runs with the transfer of a property when a third party damages the property before it is sold to a new owner, or in the alternative, can the right, if assigned, be enforceable.

Environmental Law

Metcalf v. County of San Joaquin

(S144831) – Whether, for a public entity to be liable for an injury caused by a hazardous condition on its property, the injured person must show the public entity wrongfully created the hazard.

Foreclosure

Biancalana v. T.D. Service Co

(S198562) – Whether, when a trustee’s sale has taken place but the trustee has not yet delivered the deed to the highest bidder, the trustee may set aside the sale if he makes an error in the processing and announcement of a beneficiary’s credit bid.

Government Property

Murphy v. Burch

(S159489) – Whether an easement by necessity is available to a parcel of land when the government owned and conveyed it without first acquiring the easement by eminent domain. [For RCD of (uncitable) lower court opinion click here.]

Indemnity

Prince v. Pacific Gas & Electric Company

(H028957) – Whether a landowner can claim implied contractual indemnification for injury to another caused by power lines against a power company which has statutory immunity from such injury.

Insurance

Century National Ins. Co. v. Garcia

(S179252) – Whether a homeowner’s fire insurance provider must pay damages to an innocent homeowner when the fire was deliberately set by a co-insured family member.

(S145571) – Whether a city’s failure to give proper notice to a property owner before the city repairs or abates a nuisance invalidates the appointment of a receiver to remedy the substandard condition of the owner’s property.

Whether a receiver appointed by the city is permitted to sell or demolish substandard improvements on a property when the owner wishes to use the improvements as his family residence.

Hernandez v. City of Hanford

(S143287) – Whether an ordinance limiting furniture sales to retail stores of a minimum size in a particular commercial zone violates the equal protection rights of small retail store owners.

Manta Management Corporation v. City of San Bernardino

(S144492) – Whether an adult nightclub accused of allowing prostitution on its premises is entitled to be compensated by the city when the city obtains a preliminary injunction based on a zoning ordinance later declared unconstitutional.

Legal aspects

Ralphs Grocery Co. v. United Food & Commercial Workers Union Local 8

(S185544) – Whether the parking area and walkway in front of a retail store within a larger shopping center constitutes a “public forum” for the purposes of a labor union protest. [For RCD of (uncitable) lower court opinion click here.]

(F058434) – Whether evidence of factual misrepresentation regarding the terms contained in a written agreement at the time it is entered into is admissiblein a court of law.

Option contracts

Steiner v. Thexton

(S164928) – Whether a real estate contract allowing for buyer revocation is considered an unenforceable option agreement due to lack of consideration, or a purchase agreement since the buyer’s discretion to revoke the contract was eliminated by the covenant of good faith and fair dealing, or was the seller estopped from canceling due to the buyer’s reliance to his detriment on the seller’s promise to sell. [For RCD of (uncitable) lower court opinion click here.]

(S142211) – Whether, after the county fails to provide an owner with a notice of tax sale, the one-year statute of limitations to set aside the tax deed was suspended until the owner became aware of the tax sale.

Public Utilities

Guzman v. County of Monterey

(S157793) – Whether a county is liable for not reviewing and responding to water quality reports as mandated.

Sprint Telephony PCS v. County of San Diego

(S14554) – Whether a county is prevented from regulating the installation of wireless cellular facilities in a public right of way.

Sex offender residency restrictions

People v. Mosley

(G038379) – Whether registered sex offenders are entitled to relief from residency restrictions on the ground that the restrictions are improperly applied retroactively, unreasonable, and unconstitutional.

Recently Decided United States Supreme Court Cases

Wilkie v. Robbins

(No. 06-219) – Whether a government official acting under authority of their office can be guilty of extortion for taking property for the government’s use. [For RCD of United States Supreme Court opinion click here.]

United States v. Atlantic Research Corp.

(No. 06-562) – Whether an individual potentially responsible for the cleanup costs of contaminated property may bring an action against another potentially responsible party. [For RCD of United States Supreme Court opinion click here.]

Recently Decided California Supreme Court Cases

Action Apartment Association, Inc. v. City of Santa Monica

(S129448) – Whether a city ordinance limiting a landlord’s ability to evict a tenant is preempted by state law. [For RCD of California Supreme Court opinion click here.]

Castaneda v. Olsher

(S138104) – Whether a mobilehome park owner has a duty to prevent the occurrence of criminal acts of gang violence on his premises when the owner has knowledge of prior gang violence on the premises. [For RCD of California Supreme Court opinion click here.]

Diaz v. Bunkey

(S194150) – Whether a homeowners’ association (HOA) is bound by an arbitration provision contained in the covenants, conditions and restrictions (CC & Rs) that were executed before the HOA came into existence. [Precedent for the same arbitration issue was recently set by the California Supreme Court in Pinnacle Museum Tower Assn. v. Pinnacle Market Development LLC. For RCD of California Supreme Court Pinnacle opinion click here.]

Fashion Valley Mall, LLC. v. National Labor Relations Board

(S144753) – Whether a shopping mall owner may enforce a rule allowing individuals to protest on mall property so long as they do not boycott tenants of the mall. [For RCD of California Supreme Court opinion click here.]

The Metropolitan Water District of Southern California v. Campus Crusade for Christ, Inc.

(S141148) – Whether, in an eminent domain action to determine the amount of compensation for a taking, rules exist for considering the probability of a re-zoning. [For RCD of California Supreme Court opinion click here.]

Muzzy Ranch Co. v. Solano County Airport Land Use Commission

(S131484) – Whether, for the purpose of state environmental impact law, a county’s land use plan which relocates a housing development near an Air Force base constitutes a “project.” [For RCD of California Supreme Court opinion click here.]

Patel v. Liebermensch

(D048582) – Whether an option contract to purchase real estate which lacked terms for the time and manner of payment of the price negates the formation of a valid contract. [For RCD of California Supreme Court opinion click here.]

Pinnacle Museum Tower Assn. v. Pinnacle Market Development LLC

(S186149) – Whether a homeowners’ association (HOA) is bound by an arbitration provision contained in the covenants, conditions and restrictions (CC & Rs) that were executed before the HOA came into existence. [For RCD of California Supreme Court opinion click here.]

(S198722) – Whether a homeowners’ association (HOA) is bound by an arbitration provision contained in the covenants, conditions and restrictions (CC & Rs) that were executed before the HOA came into existence. [Precedent for the same arbitration issue was recently set by the California Supreme Court in Pinnacle Museum Tower Assn. v. Pinnacle Market Development LLC. For RCD of California Supreme Court Pinnacle opinion click here.]

Save Tara v. City of West Hollywood

(B185656) – Whether, under the California Environmental Quality Act (CEQA), a city is required to conduct an environmental impact report prior to approving the conveyance and further development of historic residential property. [For RCD of California Supreme Court opinion click here.]

Steinhart v. County of Los Angeles

(B190957) – Whether the acquisition of a life estate in real property constitutes a change in ownership triggering a property tax reassessment if the transfer is approximately equal in value to the fee interest. [For RCD of California Supreme Court opinion click here.]

Verano Condominium Homeowners Assn. v. La Cima Development, LLC

(S202596) – Whether a homeowners’ association (HOA) is bound by an arbitration provision contained in the covenants, conditions and restrictions (CC & Rs) that were executed before the HOA came into existence. [Precedent for the same arbitration issue was recently set by the California Supreme Court in Pinnacle Museum Tower Assn. v. Pinnacle Market Development LLC. For RCD of California Supreme Court Pinnacle opinion click here.]

Villa Vicenza Homeowners Assn. v. Nobel Court Development, LLC

(S190805) – Whether a homeowners’ association (HOA) is bound by an arbitration provision contained in the covenants, conditions and restrictions (CC & Rs) that were executed before the HOA came into existence, and whether the state law doctrine of unconscionability may be applied only to the arbitration provision and not the other provisions in the CC & Rs. [Precedent for the same arbitration issue was recently set by the California Supreme Court in Pinnacle Museum Tower Assn. v. Pinnacle Market Development LLC. For RCD of California Supreme Court Pinnacle opinion click here.]

About The Author

is a licensed real estate agent and the senior editor in charge of the first tuesday Forms, and the
Agency, Fair Housing, Trust Funds, Ethics and Risk Management, Real Estate Matters and Real Estate Principles courses.

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